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Oil prices rise on global supply worries

(Xinhua)
Updated: 2008-06-24 10:39

Crude futures continued to climb up Monday as the supply worries outweigh Saudi Arabia's promise to boost output.

Light, sweet crude for August delivery topped $138.14 a barrel before retreating to settle at $136.74 a barrel, trading up $1.38, on the New York Mercantile Exchange.

A global energy summit meeting led by Saudi Arabia ended Sunday with the Saudis promising to boost its daily oil production from 9 million barrels to 9.7 million barrels. Saudi officials also said the government will invest in oil projects to allow a daily production of 12.5 million barrels by the end of next year.

But many analysts believed that, with no resolution on other practical steps, the move will not drive down oil prices any time soon. Moreover, the market had already priced in the extra output.

Meanwhile, investors are concerned that a tense situation in Nigeria could potentially disrupt supply from Africa's largest oil producer. Royal Dutch Shell PLC said it can not meet the contractual obligations to export oil from a Nigerian oil field following a militant attack Thursday, and Chevron Corp was reported to have shut down a oil facility in Nigeria following a militant attack. Also, a strike against Chevron by Nigerian workers began Monday.

The US Congress held a hearing Monday on whether or not further regulation of trading is warranted to curb rising oil prices.

In London, Brent crude for August delivery rose $1.05 to settle at $135.91 a barrel on the ICE Futures Exchange.